MARKIT, DTCC TO COMBINE UNITS INTO NEW COMPANY FOCUSING ON DERIVATIVES TRANSACTIONS

Posted July 21, 2008

LONDON and NEW YORK – Markit and The Depository Trust & Clearing Corporation (DTCC) are forming a new company that will combine Markit’s front- and middle-office trade-processing services with DTCC Deriv/SERV’s post-trade confirmation and matching services, into a single gateway for confirmation of over-the-counter (OTC) derivative transactions globally.

The as-yet-unnamed company will allow buy- and sell-side OTC derivative market participants to confirm trades and access additional Markit and DTCC services through a common portal. The services will included the MarkitWire platform (formerly SwapsWire), MarkitTrade Manager, Markit Tie Out and Markit Port Rec, as well as DTCC’s Deriv/SERV matching and confirmation engine, AffirmXpress, MCA Xpress and Novation Consent services.

“Both DTCC and Markit have been instrumental in the OTC derivative community’s efforts to strengthen the operational infrastructure of this dynamic market,” says Eraj Shirvani, Chairman of the International Swaps & Derivatives Association (ISDA) and Managing Director and co-Head of European Credit at Credit Suisse. “This alliance is a groundbreaking combination that reaches across borders and asset classes to provide a service that will help a wide range of market participants achieve greater certainty in their transaction processing.”

In addition to facilitating greater industry adoption of electronic confirmation, the new company will offer automated trade affirmation, trade allocation and novation consent solutions to the market on a cross-product basis. It will initially support both DTCC’s and Markit’s confirmation platforms.

“Since launching Deriv/SERV’s matching and confirmation service in late 2003, DTCC has been committed to helping the OTC derivatives community automate transaction processing and build a robust infrastructure in this rapidly growing market,” says Michael Bodson, Executive Managing Director for DTCC’s Business Management and Strategy overseeing all DTCC business lines, who will be Chairman of the new company. “This important new strategic partnership with Markit reflects our ongoing strategy of aligning with other key service providers as a way to help the industry meet its goals and to better serve our customers.”

The new company will be jointly owned by DTCC and Markit, and will be governed by an 11-member board of directors. Jeff Gooch, Executive Vice President of Markit, will be the new company’s chief executive officer.

“By combining the individual strengths of Markit’s trade-processing services and DTCC’s Deriv/SERV, we are taking a major step forward in addressing the calls from global regulators and customers for a fully integrated system for processing OTC derivatives,” says Lance Uggla, Chief Executive Officer of Markit. “We believe the time is right for consolidation around a combined framework to address the challenges of rapid growth, operational risk and high costs in the OTC derivative markets.”